Philadelphia Board' New York Board New York Board' Elevated Board Stage Private Telegraph Boxes Rostrum Indicator 3 Private Booths customer. As a board is a central point to which are brought the buying and selling demands of a great city or of a country, on the floor of the board may be heard the concentrated outcries and the uproar of auctioneers of the many places which otherwise would be dealing in stocks and bonds; it is this that makes a boardroom seem so much like bedlam. On the floor will be found the brokers representing leading houses. At one side of the room are private boxes, in which will be found the clerks or operators, who have direct communication with the offices of members trading on the floor. From these private boxes the business of the offices will be communicated to the the floor 5 6 Visitors' Gallery Entrance Entrance to Main man, and purchases or sales on the floor will be returned to the several offices. On the wall of the Philadelphia Exchange, beside the president's chair, is also an electric indicator, on which will be found consecutive numbers representing the various trading numbers of members on the board floor. When a member on the floor is wanted, a button is pressed and a light flashes out the number of this member, to which he at once responds. The member on the floor, therefore, has to have his eye constantly turned toward the indicator as well as keep in mind the whole trading situation on the floor; besides, he must keep in touch with the business demands of the office. When business is brisk this is a difficult part to play. On a side-wall of the board-room will be recorded the transactions (purchases and sales) of the local market, as well as those of other leading boards. of the bro The facilities for business and the business transacted on the several boards are very largely dependent on the Organization organization of the broker's office. Customers are not allowed on the floor of the board. ker's office. They are found in the office of the broker. In what is known as a board-room (see page 278), usually in the rear of the broker's office, are tickers, which give the quotations and the transactions on the several markets almost as soon as the business itself has been completed. The customer, therefore, is in possession of the facts of the market practically as soon as the broker himself. He is also in touch with the office members of the firm; the orders of customers for purchase and sale pour in from all parts of the country to the central market. The specu Considerable of mystery surrounds the name broker. This is partly due to the fact that the ordinary individual does not employ a broker to make purchases lative side of and sales. When he wishes to purchase, he broking. goes to a merchant-i. e., one who has for sale a stock of things desired. When he wishes to sell, he sells directly to a purchaser without the intervention of a special agent. The mystery associated with the name is in a measure due to the fact that a considerable part of a broker's constituency is made up of speculators. The facilities given. to making purchases and sales, the arrangements for the distribution of market quotations and transactions on the various central boards, bring with them a class of dealers who endeavor to obtain an income from taking advantage of market fluctuations. It is this that distinguishes speculation from investment. The investor is one who purchases a property or business interest outright and as a result of judgment based on "what the concern has earned." His profits may come from Distinction between in vestment and speculation. a rise in value of the property, or from income in the form of interest or dividends, but in last analysis it is dependent on the income or prospective income of the property. The speculator, however, cares not what may be the income-producing power or earning capacity of a business concern. All that he is interested in is a market fluctuation; it makes no difference whether the property becomes more or less valuable-which way the fluctuation may go-so long as he may place himself in a position to take advantage of the rise or fall. Since this is the end, and, as one may say, is his business, it is, usually, not to his advantage to purchase and pay for the property. He would so use his trading capital that he may control as large a block of stock or other property as is possible for the purpose of getting the benefit of the change in price. He therefore buys on a margin-a margin sufficient to give him control for such a time as, in his judgment, will allow of a fluctuation in his interest. It is this kind of buying that gives rise to a large part of the business of broking. It is to this class of transactions also that much of the financial uncertainty and misfortune of the past and the present is attributable. The If one should go to a broker's office day after day, there will be found a constituency in the chairs of his boardroom, or going in and out keeping an eye on speculative the market, to which may be traced a very large constituency. portion of his orders. The manner in which a market may be affected by these speculative purchases may be seen from a glance at the chart on page 280, which shows the organization of a single broker's business. This map, or sketch, represents the private wires connecting the various offices of a single concern over which streams of orders flow into the main office for execution and which find their way into the general pool on the board floor. When fluctuations are great then trade is brisk. This is a common observation. Yet this trade is very largely a speculative one, and as fluctuations rise and fall, the capital which is used for speculative margins becomes gradually absorbed. The test of one's ability to remain in the speculation is found in his ability to keep his margins good. With these speculative orders pouring in there is a ccnstant flow of capital toward the financial centers, which finally find their way into the conservative financial institutions. The capital drawn from the purses of the speculating multitude finds final employment at the hands of the few who have the prudence and judgment necessary to conservative commercial and industrial undertakings. The bucketshop. As a means of accommodating speculators who are unable to trade on large margins and yet who are anxious to gamble on the turn of the "wheel of fortune" in the market, a class of business has been organized which has its center in the "bucket-shop." This is nothing more or less than a room in which quotations are given representing the fluctuations of the market and which allows one to take chances on price movements. In this it does not differ from the regular speculative business in the broker's office. Their methods differ, however, in that the ones conducting the office or "bucket-shop" are not in any manner regulated by a board, that they do not have their commissions determined by association rules, and that they take margins of any amount. Instead of having a wire or ticker that gives the official quotations of the central markets in a language that may be understood, and that is open to inspection, the bucket-shop has a private wire over which quotations are received by a telegraph operator. These communications may not be read by the customer, as in the case of the ticker, and therefore the operators are the only ones that have a knowledge of what is going on. At one window, therefore, will be a margin-taker-one who takes the money of customers and records the chances taken. The customer will then take a seat in the room and watch the board for movements in his stocks. Thus gambling in |